On January 1, 20X1, Parent Company purchased 100% of the common stock of Subsidiary Company for $280,000. On this date, Subsidiary had total owners' equity of $240,000.
On January 1, 20X1, the excess of cost over book value is due to a $15,000 undervaluation of inventory, to a $5,000 overvaluation of Bonds Payable, and to an undervaluation of land, building and equipment. The fair value of land is $50,000. The fair value of building and equipment is $200,000. The book value of the land is $30,000. The book value of the building and equipment is $180,000.
Required:
a.
Using the information above and on the separate worksheet, complete a value analysis schedule
b.
Complete schedule for determination and distribution of the excess of cost over book value.
c.
Complete the Figure 2-5 worksheet for a consolidated balance sheet as of January 1, 20X1.

Question

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The Answer of On January 1, 20X1, Parent Company purchased 100% of the common stock of Subsidiary Company for $280,000. On this date, Subsidiary had total owners' equity of $240,000.
On January 1, 20X1, the excess of cost over book value is due to a $15,000 undervaluation of inventory, to a $5,000 overvaluation of Bonds Payable, and to an undervaluation of land, building and equipment. The fair value of land is $50,000. The fair value of building and equipment is $200,000. The book value of the land is $30,000. The book value of the building and equipment is $180,000.
Required:
a.
Using the information above and on the separate worksheet, complete a value analysis schedule
b.
Complete schedule for determination and distribution of the excess of cost over book value.
c.
Complete the Figure 2-5 worksheet for a consolidated balance sheet as of January 1, 20X1.

On January 1, 20X1, Parent Company Purchased 100% of the Common